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October 30, 2008

UPDATE: DENMARK: Arla mulls acquisitions in shake-up

Arla Foods is mulling tie-ups and possible acquisitions in Germany and Poland as it looks to beef up its presence in the European dairy sector.

Arla Foods is mulling tie-ups and possible acquisitions in Germany and Poland as it looks to beef up its presence in the European dairy sector.

The Denmark-based dairy giant today (30 October) unveiled a wide-ranging shake-up of its global operations, including plans for a greater focus on the German and Polish markets.

The two countries will join Arla’s group of “core” markets – Sweden, Denmark, the UK and Finland.

A spokesman for Arla told just-food that the company’s analysis of the dairy sector found that milk production is set to rise significantly in northern Europe.

“We have to come up with a  response of how to react to that situation,” he said. “That could involve different options; we could look at working with local partners in those countries.”

When asked if Arla would look at strategic alliances or acquisitions in northern Europe, the spokesman said those options were “on the table”.

Arla’s global review also includes plans to double its investment in product innovation, while consolidating its brands into three “strong, global brands” – Castello, Lurpak and a new namesake brand.

The company is looking to take its spending on innovation to DKK400m (US$69.4m), investment that would include efforts to build a global Arla brand, the spokesman said.

“We would put the Arla brand name on products that fall under the headline of ‘closer to nature’,” the spokesman said. “Products aligned with that concept would not go away but we want to make the Arla brand more visible.”

Under the plans, Arla has designated the US, China and Russia as “special growth markets” and will win more share of Arla’s spending.

The company is also looking to double its worldwide sales of whey protein.

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